Showing posts from August, 2002

How to invest when stocks are on a high & still make money

The equity market is on a high these days. The Sensex hit 31,291 on June 22 2017, rising about 17 per cent from a year ago and about 19 per cent year to date (YTD). Given the phenomenal rise, should investors continue to park funds in stocks? 
Different people have different investing styles. While some follow aggressive styles with shorter investment horizons, most believe in investing for the long term with a minimum of three- to five-year outlook. 
During a discussion at work, a colleague made an interesting point - his equity mutual fund SIP opened in January 2008 (the high point of that market cycle) has yielded him an annual compounded return of 12 per cent till date; he continues to hold on to the same. 
While one may argue that this is no great feat as the return in absolute terms is not much to write home about, the key takeaway here for readers is that despite investing at a time when valuations and markets were at a peak, this particular investment has yielded him 1.5 time…

How to Invest When Market Volatility Picks Up

We are currently investing in an extremely noisy political and economic environment. While markets have remained remarkably subdued during recent times, it is inevitable that greater volatility will emerge. The question is: how should we respond?
As investors, our natural impulse when faced with arresting news or growing uncertainty is to react. Our instincts tell us to take action to protect portfolios or to profit from a particular outcome. This adrenaline fuelled ‘fight or flight’ response is deeply ingrained within us and exists for good evolutionary reasons as early humans who did not have these instincts were less likely to have decedents.
However, this impulse towards action causes a real challenge for investors.
There is an abundance of great research on this topic; however one of the most relevant was a study by Barber & Odean which shows a clear link between portfolio turnover and the results generated by individual investors.
Those portfolios in the highest quintile of…

How to Invest 1 Million Dollars Wisely

With $1 million to invest, do some comparison shopping and look at average costs.
I would rather have a million friends than a million dollars.--Eddie Rickenbacker
Mr. Rickenbacker is entitled to his preferences, but many of us would rather have the million dollars -- and perhaps just 10 or 20 or even 100 friends. Some of us even have a million dollars -- by having saved and invested over many years, via a lucky inheritance, or by some other means.
When you have a lot of money, you need to be sure to invest it wisely, preserving much or all of its value. That's where private asset management or an account management advisor can come in handy. It's smart to do a comparison of your options, assessing the cost and fee schedule and typical charges for each one. You may also want to invest the money on your own, with a potential focus on dividend-paying stocks, annuities, and other income-generating assets.
Here are some key ways to invest $1 million.
Private asset management or ac…